Review Test 1

Which best defines scarcity?

• Scarcity is fake news

• Resources are limited

• Resources are expensive

• Greedy people in the world

Bobby calls into work to play the latest version of GTA for five hours. If Bobby gets paid $12 an hour and also paid $50 for GTA, what is his opportunity cost?

• $62

• $310

• $110

• $50

In the year 3344, when Earth runs of water, it cannot be replaced. What is this an example of?

• Shortage

• Scorched Earth

• Scarcity

• Opportunity Cost

Edgar quit his job where he worked 20 hours a week and made $15 an hour because it didn’t fit with his school schedule. He was able to find another job that only required 15 hours of work per week and paid $8 an hour. What was Edgar’s weekly opportunity cost for switching jobs?

• $120

• $300

• $100

• $180

Alex and Bobby are the only producers in their economy. Both students produce chairs and tables. After a long discussion it is determined that Alex will produce both items because they have the absolute advantage in both given a certain amount of time. Why is this decision wrong, economically?

• Bobby should produce one of the items, given the fact that you can’t have a comparative advantage in making two items and that is what’s most important?

• This is not wrong economically. If Alex can produce more of each, given a certain amount of time, then Alex should do so.

• Alex should pick which item they want to produce and let Bobby produce the other.

• Bobby should pick which item they want to produce because Alex is more efficient at both, so Alex should be good either way.

Alfred and Breanna are both producers of pants and shorts. Alfred makes pants with an opportunity cost of 4 shorts and Breanna makes pants with an opportunity cost of 2 shorts. If they agree to exchange 1 pant for 1 short, which of the following statements is true?

• Alfred benefits and Breanna loses

• Breanna benefits and Alfred loses

• Both students lose

• Both students benefit

Emily mows yards for $20 an hour and repairs cars for $10 an hour. She has 3 hours of lawn mowing and 2 hours of car repairs on a weekend. She also needs her lawn mowed and her car repaired, which, combined, is a 7 hour job. Noah said that he will mow Emily’s lawn and repair her car for $10 an hour while Emily works. Should Emily take this deal or do the work herself?

• 
  
  Emily should skip work and mow her own lawn/fix her own car

• 
  

  Emily should take the deal and let Noah mow her lawn/fix her car

• Emily can choose either option and she will benefit

• Given the information above, there is no way to tell which choice will be beneficial

Using the chart above, an economy is currently producing a combination of 45 healthcare and 10 education resources. This economy can be considered:

• Effiicent

• Inefficient

• Impossible

• All of the above

Using the production possibilities curve above, which combination of goods would be impossible to produce. 

• 10 healthcare and 10 education

• 45 healthcare and 25 education

• 10 healthcare and 50 education

• 60 healthcare and 25 education

The idea that “all other things should remain constant” is best defined as:

• Absolute Advantage

• Ceteris Paribus

• Opportunity Cost

• Marginal Thinking